Easy Loan Corporation et al v Base Mortgage & Investments Ltd et al, 2018 ABQB 979

Court of Queen’s Bench of Alberta Citation: Easy Loan Corporation et al v Base Mortgage & Investments Ltd et al, 2018 ABQB 979 Date: 20181130 Docket: 1501 11817 Registry: Calgary Between: Easy Loan Corporation and Mike Terrigno Plaintiffs - and - Base Mortgage & Investments Ltd., Base Finance Ltd., Arnold Breitkruetz, Susan Breikruetz, Susan Way and GP Energy Inc. Defendants _______________________________________________________ Reasons for Decision of the Honourable Madam Justice B.E. Romaine _______________________________________________________ I.

Introduction [ 1 ] Arnold and Susan Breitkruetz, two of the defendants in the receivership of Base Mortgage & Investments Ltd. and Base Finance Ltd., Arnold Breitkruetz, Susan Breitkruetz, Susan Way and GP Energy Inc. (the “debtors”) apply pursuant to Rule 9.15 of the Alberta Rules of Court to vary a decision issued by this Court on December 2, 2016 (the Decision), which is currently under appeal. [ 2 ] Rule 9.15 (4)(

a) and (

c) allows the Court to set aside, vary or discharge an interlocutory order either because information arose or was discovered after the order was made or on any other grounds that the Court considers just. Rule 9.15 (4)(

b) is not applicable

in this case. [3] With respect to whether information has arisen or was discovered after the Decision:

a) all of the evidence adduced by Mr. Breitkreutz in the application has been in existence in the books and records ofthe debtors seized by the Receiver since the receivership proceedings began. I am satisfied by the evidence submitted by the Receiverthat Mr. Breitkruetz’s affidavit setting out what he characterizes as new evidence was available to him before the application that led tothe Decision was heard;

b) even if there was new admissible evidence introduced by Mr. Breitkreutz’s affidavit, which is not the case, thatnew evidence would not change the Decision; and

c) the summaries of the “new evidence” prepared by Mr. Breitkreutz and Ms. Way are not supportable whencompared to the books and records in the possession of the Receiver, and are thus not credible. [4] However, it appears that Mr. Breitkruetz does not rely on this ground in any event. In his affidavit of June 20, 2017, he statesthat: I do not consider any of the information set out herein to be “new evidence”, as the records were in the possession of the Receiver throughout these proceedings.

In reality, this is my first opportunity since these proceedings against me and my companies began in October 2015 to set out the below information with proper documentary support. [5] He submits that the counsel who represented him in the application that led to the Decision was not “able to properly explainthe history of [the debtor companies] to the Court”, and criticizes his counsel for not “securing” for him copies of records seized by theReceiver. If there is any foundation to this complaint, the remedy does not lie with Rule 9.15. [6] I have reviewed the other grounds on which Mr.

Breikruetz relies and find that there is is no reason to set aside or vary theDecision. II. Analysis A. New Information [7] As noted previously, Mr. Breitkruetz concedes that the information he adduced at the application was not “new evidence”.However, the Receiver presented persuasive evidence in its Supplemental Report to the Sixth Report dated March 12, 2018 that all theinformation used to produce the evidence set out in Mr. Breitkruetz’s affidavit came from records in the possession of the Receiver thatMr. Breitkreutz was able to access before the hearing that led to the Decision.

I am also persuaded by the Receiver’s detailedreconciliation of the information provided in Mr. Breitkruetz’s affidavit that there are substantial discrepancies between the sourcedocumentation in the possession of the Receiver and Mr. Breitkruetz’s claims in the affidavit and the spreadsheets prepared by Ms.Way. It is unnecessary for the purpose of this decision to give details of such discrepancies, as the information was in any eventdiscoverable before the hearing. Thus, Rule 9.15 (4)(

a) does not entitle Mr. Breitkruetz to a reconsideration. [8] Mr. Breitkreutz’s submission that he was unable to access records held by the Receiver is disingenuous. It is clear from theevidence that Mr. Breitkreutz and Ms. Way attended at the Receiver’s offices to review documents on April 5, July 13 and 14, 2016,prior to the August 17, 2016 hearing. All of these reviews took place while Mr. Breitkreutz was represented by his previous counsel,who did not attend any of these document reviews. There is no credible evidence that the Receiver prevented Mr. Breitkreutz fromreviewing the records. B.

Other Grounds to Reopen the Decision [9] Mr. Breitkreutz submits that the Court may exercise its discretion to re-open a decision on the basis that, on its ownreconsideration of the record, the original decision was in error because it overlooked or misconstrued material evidence or misappliedthe law. He relies on a British Columbia case that is distinguishable because it involved an order that had not yet been entered: Sykes vSykes (1995) 6 BCLR (3d) . In this case, I am clearly functus unless the grounds set out in Rule 9.15 (

a) and (

c) mandate relieffor Mr. Breitkreutz. [10] Mr.

Breitkruetz submits that the Decision was “an overreach”, and that the inquiry made by the Receiver was insufficient.The issue of whether the Decision was an overreach or whether the Court overlooked or misconstrued material evidence or misappliedthe law is an issue for the Court of Appeal, and I will not address it further. [11] With respect to the Receiver’s inquiries and analysis, it is clear from the Receiver’s reports and its submissions at the hearingthat the Receiver has made thorough inquiries into a problematic estate that was hampered by poor record keeping and Mr. Breitkreutz’sfailure to cooperate.

The assumption that funds were withdrawn from the Base Finance account for the personal benefit of the individualdebtors was a valid and reasonable inference from the limited evidence available to the Receiver, and the lack of persuasive or credibleevidence to the contrary. [12] Mr. Breitkreutz complains that the Receiver did not make efforts to determine the authenticity and validity of certain “deedsof trust” relating to property in Texas.

This submission was made at the hearing that led to the Decision and, as noted in the Decision, theReceiver gave credible and reasonable reasons why such an investigation would not have been to the benefit of the estate. III. Conclusion

[ 13 ] The application is dismissed. If the parties are unable to agree on costs, they may make short written submissions to this Court on that issue. Dated at the City of Calgary, Alberta this 30 th day of November, 2018. B.E. Romaine J.C.Q.B.A. Appearances: Christopher Souster for Easy Loan Robert Calvert, Q.C. and Trevor Gair for the Arnold and Susan Breitkreutz Richard Billington Q.C., Stephen Kroeger and Richard Hayles for the Receiver